Cybersecurity Insurance 101: Every Businesses Should Know

Almost every business is at risk of a cyberattack — hackers are opportunistic and will go after the easiest prey. That’s why companies need to have cybersecurity insurance in place.

What is cybersecurity insurance?

It provides financial protection for businesses following a cyberattack, such as a data breach or hacking, covering response and recovery expenses, legal fees, and public relations costs related to the attack.

What does cybersecurity insurance cover?

Most plans will typically cover the following:

• Expenses incurred from responding to and recovering from a cybersecurity crisis
• Financial losses from fraudulent wire transfers, data extortion, damage to digital assets, and business interruption
• Forensic expenses to determine the scope and source of the data breach
• Costs incurred from notifying customers, employees, business partners, and relevant authorities about the breach
• Legal fees associated with defending against data breach lawsuits
• Fees from public relations consultants who will help manage the fallout from a data breach\

What are the exclusions in cybersecurity insurance?

Just like any plan, there are exclusions and limits to what it will cover. For example, most policies will not cover the cost of property damage caused by a cyberattack and lost revenue due to a data breach. Insurance companies may sometimes exclude coverage for certain security incidents, such as employee negligence.

That's why it's crucial to read the fine print of any policy before purchasing it. Businesses should also work with an experienced insurance broker who can help them find a policy that meets their specific needs.

What cyber threats should businesses be insured for?

There are many types of cyber threats worldwide, but businesses should focus on insuring themselves against the most common ones. These include:

• Data breaches – Whenever sensitive information is lost, stolen, or released without authorisation, it’s considered a data breach. This can happen if hackers gain access to a company’s servers or if an employee accidentally sends customer data to the wrong person.
• Phishing scams – Phishing is a type of cyberattack where hackers send fake emails or texts to get victims to click on a malicious link or attachment. This can lead to malware infecting devices or compromising sensitive information.
• Malware – Malicious software can find its way onto a computer or device and wreak havoc by deleting files, stealing information, or completely taking over the system.
• Ransomware attacks – Ransomware encrypts files and renders systems inoperable until the victim pays a ransom, usually with cryptocurrency. This can be extremely disruptive and financially devastating for a business, especially if they don’t have data backups.

Who needs cybersecurity insurance?

Any organisation that stores sensitive information or relies on technology should consider cybersecurity insurance. However, certain industries are often prime targets for cybercriminals and should take extra steps to protect themselves. Such as:

1. Healthcare
2. Banking and financial services
3. Personal services
4. Legal, accounting, and management services
5. Education

How much does cybersecurity insurance cost?

Premiums for cybersecurity insurance can vary depending on several factors, such as the insurance provider, the size of the business, the industry it’s in, and the amount of coverage it needs.?

How to insure a company?

Getting cybersecurity insurance involves completing a few steps. The first is to conduct a cybersecurity audit. This will help a business understand the vulnerabilities in its current security measures and the types of risks it is often exposed to. Consulting with a cybersecurity expert like Empower IT Solutions can be helpful for providing an objective assessment and assistance in finding the appropriate cybersecurity insurance provider in Australia.

If you have any more questions about cybersecurity insurance, Empower IT can answer them. We have a team of certified cybersecurity experts who can help you understand your risks and ensure your company is well protected. Contact us today to give your business the safety net it needs.